A Small, Flexible Solution for Rural Business Financing

Evergreen's Rural Loan Program uses funds provided by the U.S. Department of Agriculture to offer the best benefits of familiar Small Business Administration loan programs in one small, flexible package for businesses. The program is available to businesses located areas with a population of 25,000 or less in the following Washington state counties: Clallam, Clark, Cowlitz, Grays Harbor, Jefferson, King, Kitsap, Kittitas, Klickitat, Mason, Pierce, Skagit, Skamania, Thurston and Yakima. 

Like the SBA 504 program, it offers a low-down-payment, long-term, low-fixed-rate financing solution to borrowers. Lenders can reduce their risk by partnering with Evergreen to offer a 504 look-a-like, two loan financing structure.   In addition, like the SBA 7(a) program, it provides a more flexible use of funds not only for real estate and equipment, but for inventory, working capital and refinancing existing debt. Evergreen can lend without a partner for businesses with more equity to contribute.

The Rural Loan Program can also be a sole source lender for loans to businesses that cannot obtain bank financing.  Examples include real estate, equipment, working capital (collateralized by hard assets) and inventory loans.

Types of eligible recipients are broader than the SBA programs you already know. They must be individuals, public or private companies/organizations who are unable to finance the proposed project from its own resources or through commercial credit or other Federal, State, or local programs at reasonable rates and terms. This might include some non-profits that have revenue from sales or fees to support the operation and repay the loan.

Potential borrowers will be analyzed according to the "Five Cs of Credit": character (integrity), capacity (sufficient cash flow to service the obligation), capital (net worth), collateral (assets to secure the debt), and conditions (of the borrower and the overall economy). 

Loans must be for community development projects, the establishment of new businesses, expansion of existing businesses, creation of employment opportunities, or saving existing jobs. 

Use of funds:

• Working capital
• Inventory
• Furniture, fixtures and equipment (FF&E)
• Leasehold improvements
• Buildings
• Debt refinancing

An Evergreen Rural loan from the USDA Intermediary Relending Program (IRP) fund can range from $10,000 to $250,000. The fund generally provides 35-50% of the total project costs, with the remainder funded by a lender or the business. The USDA regulations will not allow loan requests to exceed $250,000 or 75% of the total project costs.

One of the factors driving the need for the program is the lack of small business loans to both new and existing businesses, particularly in the range of $10,000 to $50,000, which are not available from conventional private or SBA sources.

For more information contact your local Evergreen Senior Loan Officer.